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Tax Traps of Personally Guaranteeing a Loan to Your Corporation
If you’re considering guaranteeing, or are asked to guarantee, a loan to your closely held corporation, it’s important to understand the potential tax consequences. Acting as a guarantor, endorser or indemnitor means that if the corporation defaults, you could be responsible for repaying the loan. Without planning ahead, you may face unexpected tax implications. A [...]
Understanding the Most Common IRS Notices
For many taxpayers, receiving a letter from the IRS can feel intimidating. The envelope arrives with the IRS seal, and immediately, worry sets in: Did I make a mistake? Am I in trouble? The truth is, IRS notices aren’t uncommon, and most of them can be resolved fairly easily once you understand what they mean. [...]
Blockage Discounts: Size Counts in Certain Stock Valuations
When valuing large blocks of publicly traded stock, business valuation professionals sometimes apply a “blockage discount.” This adjustment reflects the decrease in the per-share value of a block of stock that’s so large it couldn’t be sold in a reasonable period given normal trading volume. What’s the rationale behind this discount? If a block of [...]
7 Ways to Fight Friends-and-Family Discount Abuse
Small businesses often discount their products and services for employees, friends, family and loyal customers. Unfortunately, these well-meaning practices can lead to misuse, fraud and revenue loss if employees don’t follow the rules. Workers might, for example, discount merchandise in exchange for a cash bribe. Or they could innocently extend the discount to someone who [...]
Tax Court Case Provides Lessons on Best Recordkeeping Practices for Businesses
Running a successful business requires more than delivering great products or services. Behind the scenes, meticulous recordkeeping plays a crucial role in financial health, compliance and tax savings. Good records can mean the difference between successfully defending a deduction and losing valuable tax breaks. A recent U.S. Tax Court decision underscores just how important this [...]
IRS Announces Availability of Work Opportunity Tax Credit Through 2025
As appears in IRS Tax Tip 2025-60 Finding a job can be a challenge and for certain groups, it can be even harder. The Work Opportunity Tax Credit is a federal tax credit available to employers for hiring individual from certain groups who consistently face significant barriers to employment. The Work Opportunity Tax Credit is [...]
The Power of Catch-Up Retirement Account Contributions After 50
Are you age 50 or older? You’ve earned the right to supercharge your retirement savings with extra “catch-up” contributions to your tax-favored retirement account(s). And these contributions are more valuable than you may think. IRA contribution amounts For 2025, eligible taxpayers can make contributions to a traditional or Roth IRA of up to the lesser [...]
Receive $10,000 in Cash at your Business? The IRS Wants to Know About It
Does your business receive large amounts of cash or cash equivalents? If so, you’re generally required to report these transactions to the IRS — and not just on your tax return. Here are some answers to questions you may have. What are the requirements? Although many cash transactions are legitimate, the IRS explains that the [...]
Receive $10,000 in Cash at your Dealership? The IRS Wants to Know About It
Does your dealership receive large amounts of cash or cash equivalents? If so, you’re generally required to report these transactions to the IRS — and not just on your tax return. Here are some answers to questions you may have. What are the requirements? Although many cash transactions are legitimate, the IRS explains that the [...]
Beware of Potential Pitfalls When Valuing a Business under the Income Approach
Valuing a business using the income approach may seem straightforward: Estimate future earnings and apply a risk-based discount rate to calculate present value. In practice, however, it’s far more complex. Small missteps can significantly distort results, leading to values that don’t hold up in planning, negotiations or litigation. Here are three common pitfalls that experienced [...]
Payroll Tax Implications of New Tax Breaks on Tips and Overtime
Before the One Big Beautiful Bill Act (OBBBA), tip income and overtime income were fully taxable for federal income tax purposes. The new law changes that. Tip income deduction For 2025–2028, the OBBBA creates a new temporary federal income tax deduction that can offset up to $25,000 of annual qualified tip income. It begins to [...]
Run a Business With Your Spouse? You May Encounter Unique Tax Issues
Do you and your spouse together operate a profitable unincorporated small business? If so, you face some challenging tax issues. The partnership issue An unincorporated business with your spouse is classified as a partnership for federal income tax purposes, unless you can avoid that treatment. Otherwise, you must file an annual partnership return using Form 1065. [...]
How Tariffs Could Increase Your Company’s Supply Chain Risk
Your company’s supply chain is one of the many business functions vulnerable to fraud, particularly as foreign tariffs take effect. Dishonest employees and vendors are known to have taken advantage of the COVID-19 pandemic’s supply shortages and abrupt switch to remote working. Now, tariff disruptions provide a similar opportunity for fraud perpetrators. Many businesses are [...]
Teachers and Others Can Deduct Eligible Educator Expenses This Year . . . and More Next Year and Beyond
At back-to-school time, much of the focus is on the students returning to the classroom — and on their parents buying them school supplies, backpacks, clothes, etc., for the new school year. But teachers are also buying school supplies for their classrooms. And in many cases, they don’t receive reimbursement. Fortunately, they may be able [...]
Evaluating Marketability When Valuing Controlling Business Interests
When investing in a business, the buyer considers how easily the interest can be converted to cash. However, transferring private business interests isn’t necessarily quick or easy — even if you own the entire company or a controlling block of the outstanding shares. Here’s a closer look at how business valuation professionals address the issue [...]
Disclaimer
This blog is designed to provide competent and reliable information regarding the subject matter covered. However, it is being provided with the understanding that the blogmaster is not engaged in rendering investment advice. Laws and practices often vary from state to state and if investment assistance is required, the services of a licensed investment professional should be sought. The blogmaster resolutely encourages the reader/viewer to do their own research and due diligence before acting on any information contained herein. As such, Roger Rossmeisl specifically disclaims any liability that is incurred from the use or application of the contents of this blog. It should also be noted that the views contained in this blog are not necessarily representative of the opinions/beliefs of the other owners, management and/or employees of Kho & Patel CPAs.
